Meeting minutes - Technical Working Group February 5, 2019
8:30 a.m. to 4:30 p.m. EDT
Crowne Plaza Hotel, Toronto, ON
Participants: Doug Coyle (University of Ottawa), Marie-Claude Aubin (INESSS), Don Husereau (Institute of Health Economics), Dr Peter Jamieson (University of Calgary), Dr Frédérick Lavoie (Pfizer Canada), Dr Karen Lee (University of Ottawa and CADTH), Maureen Smith (Patient), Geoff Sprang (Amgen), Dr Tania Stafinski (University of Alberta)
Observers: Edward Burrows (Innovation, Science and Economic Development), Nelson Millar (Health Canada)
PMPRB: Tanya Potashnik, Isabel Jaen Raasch, Thy Dinh, Elena Lungu, Theresa Morrison
The PMPRB Working Group to Inform the Patented Medicine Prices Review Board (PMPRB) Steering Committee on Modernization of Price Review Process Guidelines (WG) met in Toronto on February 5, 2019.
Three topics were discussed at the meeting: case studies, a conceptual framework on which to base recommendations, and the questions posed to members in the WG Terms of Reference.
Case studies developed for the Steering Committee were shared by the PMPRB with members prior to the meeting to demonstrate how medicines would be evaluated using the proposed framework. The framework in the current Guidelines was compared with the proposed framework. Clarifying questions were answered by Board Staff.
In general, members felt that the case studies were useful. Some members expressed that case studies helped better explain the proposed framework. Members representing pharmaceutical companies indicated that the case studies highlight the complexity of the framework and potential operational challenges. One member expressed interest in seeing the timeline associated with each case study and how the timing of PMPRB processes will overlap with those of CADTH’s.
Prior to the meeting, a draft appendix to the Working Group report was shared with members. This report provides technical background information and explains the conceptual framework on which the Working Group will base its recommendations. Dr. Paulden presented the framework and the members discussed it.
Questions in the Terms of Reference
Topic 1: Options for determining which medicines fall into ‘Category 1’
Four criteria for classifying a medicine as “Category 1” were presented:
- The medicine is first in class or a substantial improvement over existing medicines;
- The medicine’s opportunity cost exceeds its expected health gain;
- The medicine is expected to have a high market impact; and/or
- The medicine has a high average annual treatment cost.
Members were asked the following questions:
- Should other criteria be considered?
- What are the relevant metrics for selecting medicines that meet the identified criteria and what options exist for using these metrics?
Members agreed the opportunity cost of a medicine, criterion ‘B’, is potentially an inappropriate tool for screening purposes and should be removed as a classification criterion. Members discussed that criteria “C” and “D” should be incremental in theory, although the policy intent is for them to be non-incremental.
It was discussed whether “substantial improvement over existing medicines” should be removed as a screening criterion. Some members questioned the usefulness of classifying a medicine representing a substantial improvement as Category 1 if criteria “C” and “D” were not also triggered. One member provided an example of a substantial improvement where the potential existed for excessive pricing as the new medicine would be the preferred option for clinicians. No consensus was reached regarding a recommendation to remove this proposed screening criterion. The PMPRB will verify if there are medicines that are classified as Category 1 only by the substantial improvement screening criterion.
The need to have clear definitions of “substantial improvement” was identified. The need to have clear, uncomplicated, “bright line” classification criteria to mitigate uncertainty was reiterated.
Topic 2: Application of supply-side cost effectiveness thresholds in setting ceiling prices for Category 1 medicines
Feedback was sought on two main issues: potential approaches for implementing a price ceiling based on a medicine’s opportunity cost, and potential approaches for allowing price ceilings above opportunity cost based for certain types of medicines (e.g., pediatric, rare, oncology, etc.). Members were asked the following questions.
- What are the potential approaches for considering a medicine’s opportunity cost and implementing a price ceiling?
- Should higher price ceiling(s) be adopted for certain types of medicines? If so, which medicines? How should the higher price ceiling(s) be determined?
Group members agreed that the $30,000/QALY opportunity cost threshold lacked face validity and that more research was needed to definitively determine a supply side estimate. It was acknowledged that it is consistent with values estimated for other countries but it is uncertain if it is an appropriate value for Canada. Members voiced concern with instrumental variables in empirical work. Members representing the pharmaceutical industry were concerned with the uncertainty surrounding the lack of clarity regarding point estimates and thresholds and the operationalization of this factor.
Three approaches to setting a single price ceiling for all provinces were discussed; specifically, setting a single ceiling price at which the medicine is “just” cost-effective:
- In the province or territory with the highest k;
- In the province or territory with the lowest k; or
- Across Canada as a whole.
It was agreed that the chosen approach depends on the policy objective of the government. Members noted that this was a difficult topic because of uncertainty around k. It was generally agreed that there is not sufficient information to make any recommendations on equity weights and that the PMPRB should consider supporting future research in this area.
Topic 3: Medicines with Multiple Indications
Feedback was sought on options for addressing medicines with multiple indications (e.g., multiple price ceilings or a single ceiling reflecting one particular indication).The following questions were posed to the members:
- What are the available options regarding pricing for multiple indications?
- Which option should be recommended, and why?
Members came to the general consensus that although indication-specific pricing is preferable, using one price ceiling for medicines with multiple indications is the most reasonable approach. It was discussed that there are multiple methods to defining an indication. It was noted that manufacturers do not have access to sales data broken down by indication.
Four approaches were considered as part of the conceptual framework; specifically, setting the ceiling price at which the medicine is “just” cost effective in:
- The most cost-effective indication;
- The least cost-effective indication;
- All indications; or
- The first indication considered by the PMPRB.
Members discussed removing approach 3. The possibility of adding another option that sets the ceiling price based on the indication that offers the most therapeutic improvement was considered. Members also discussed the possibility for gaming by introducing drugs by indication strategically based on which is the most cost-effective. There was discussion as to whether this would be a practical concern.
Topic 4: Accounting for Uncertainty
Members were asked to provide feedback on options for using the CADTH and/or INESSS reference cases to set a ceiling price, as well as options for accounting for and/or addressing uncertainty in point estimates. The following questions were posed to the members:
- Do existing ‘reference case’ analyses provide the most appropriate estimates from which to derive a ceiling price?
- If not, what modifications from the ‘reference case’ assumptions are desirable?
- How should uncertainty be accounted for, or addressed, when setting price ceilings?
Dr. Paulden summarised previous discussions regarding accounting for uncertainty, such as the differences between INESSS and CADTH reference case models; the possibility of creating a PMPRB reference case; the usefulness of a PMPRB pharmacoeconomic review committee; how to adjust price ceilings with real work evidence; and the challenges of having a range in the ICER instead of a point estimate. Some members voiced concern that the price reduction tables in the CADTH reference cases are not peer-reviewed and that there are no formal dispute resolution mechanisms.
It was mentioned that should the PMPRB specify a specific base case that is needed outside of what is already done by CADTH, CADTH can rerun analysis to help PMRPB with deliberations.
The conceptual framework was discussed and it was noted that uncertainty is associated with an expected loss in consumer surplus, such that reducing uncertainty results in an expected gain in consumer surplus. The conceptual framework explained that the expected loss that results from uncertainty is estimated using the “value of information” analysis. This was discussed and it was determined that although value of information analysis is useful in theory it is not feasible at the current time.
Topic 5: Perspectives
Members were asked to provide options to account for the consideration of a public health care system vs societal perspective, including the option of applying a higher value-based price ceiling in cases where there is a ‘significant’ difference between price ceilings under each perspective. Feedback was also sought on how to define a ‘significant’ difference in price ceilings between each perspective. The following three questions were posed to members:
- What are the key differences between a public health care system vs societal perspective?
- What are the options to account for these differences?
- How should a ‘significant’ difference be defined?
The PMPRB had previously clarified that the public payer perspective is the policy intent. Dr. Paulden summarised previous discussions on perspective including the challenges of the societal perspective for equity.
Members agreed that for the purposes of the WG report, it would report on deliberations including points of convergence and divergence noting that the public payer perspective was chosen as a result of the policy intent.
Topic 6: Market Size
Members were asked to provide feedback on approaches to derive an appropriate affordability adjustment to a medicine’s ceiling price based on an application of the market size and GDP factors (i.e., based on the US ‘ICER’ approach). The specific questions posed were:
- What approaches are available to consider an ‘affordability adjustment’ to a medicine’s ceiling price?
- Should other factors be considered (in addition to market size and GDP)?
- How should each of these factors be considered?
Dr. Paulden summarised previous discussion on this topic: different payers have different market growth; the use of the US ICER approach; that market size is distinct from net budget impact; potential benefit for orphan drugs; and a negative impact for medicines with large market size.
Members discussed the implications of market size adjustment as laid out in the conceptual framework. It was noted that the supply side curve for medicines are unknown.
Members discussed how to consider the GDP factor. It was noted that k reflects GDP and can be taken into account when adjusting thresholds over time. It was discussed that it would be a policy decision that determines how often and the method by which thresholds are changed. It was noted that it would be useful to know the relationship between GDP and k.
Next Steps for the Working Group
Dr. Paulden will circulate draft recommendations to members following the meeting. Members will have the opportunity to provide written feedback. Final draft recommendations will be circulated shortly after receipt of feedback and the vote on options will follow.